Cigarette tax hike advances; House bill aims to resolve Medicaid shortfall; levy would rise from 18 cents to $1.18 in Mississippi

The House Ways and Means Committee on Monday approved two pieces of legislation aimed at creating revenue sources for the Division of Medicaid and the state's struggling trauma-care system.

Committee members heard from House Medicaid Chairman Dirk Dedeaux, D-Gulfport, who explained that one bill would increase the excise tax on cigarettes by $1.

Currently, Mississippi's cigarette excise tax is 18 cents per pack - among the lowest in the nation. Gov. Haley Barbour has vetoed past cigarette tax legislation, and Senate Finance Committee Chairman Dean Kirby, R-Pearl, has said he won't consider any tax bills this year.

Dedeaux said the tax would generate about $174 million annually, based on figures from the Stennis Institute of Government at Mississippi State University. He said 90 percent of the revenue would be earmarked for Medicaid. The rest would go to the trauma system.

Lawmakers are seeking a revenue source for Medicaid , as the health-care program for the underprivileged is facing a $92 million deficit in the current fiscal year. And Medicaid Executive Director Robert L. Robinson has told lawmakers the program will need an extra $168 million in funding for the fiscal year that begins July 1.

The bill also has provisions for technical changes to the program, including how patients can select prescription drugs. Dedeaux said going to a preferred and non-preferred prescription list rather than brand name and generic would allow the program to save more money through rebates and supplements.

The cigarette tax bill was amended by the Ways and Means Committee to change its effective date from July 1 to June 1. The bill now must go back to the Medicaid Committee for approval before it progresses in the House.

From the February 20, 2008 edition of The Clarion-Ledger